A farmer can produce both wheat and barley at constant costs of production. The opportunity cost of a kilo of wheat is 1.5 kilos of barley. The price of a kilo of wheat is twice that of barley.
What should the farmer do to maximise revenue?
1 )
Concentrate on barley production.
Concentrate on wheat production.
3 )
Produce wheat and barley in the ratio 2: 1.
4 )
Produce wheat and barley in the ratio 3: 2.
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